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Distribution Group - Mail Flow Issue

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Dear Folks,

we are running Exchange 2010 with Hybrid Setup. We are currently facing an issue with Exchange online users. there is an on premises mailbox, let's say abc-user@domain.com > any email that is received to this on premises mailbox abc-user@domain.com it is forwarded to a distribution group; let's say xyz-group@domain.com. when an Exchange Online user send email to abc-user@domain.com > Exchange online user gets following error message.

"Your message can't be delivered because delivery to this address is restricted.

#550 5.7.1 RESOLVER.RST.AuthRequired; authentication required ##rfc822;"

Note: Distribution Group has this check enabled and we can't remove that "Require that all senders are authenticated"while there are only few users who are getting NDR/ error message while other Exchange online users are able to send email to on premises mailbox, abc-user@domain.com and email is getting forwarded to distribution group xyz-group@domain.com

please assist on this.


Thanks, Sheeraz


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